EXCLUSIVE: A third (33%) of employer respondents spend between 1-3% of payroll on providing health-related benefits for their workforce, according to research by Employee Benefits and Health Shield.
The Employee Benefits/Health Shield Healthcare research 2017, which surveyed 121 employer respondents in July 2017, also found that a further 21% spend less than 1% of payroll on health and wellbeing perks, while 13% spend 4-6% of payroll.
The cost of providing healthcare benefits has remained relatively consistent over the years. In 2013, 20% spent less than 1% of payroll on providing health-related benefits, while 30% spent between 1% and 3%. Looking further back, in 2006, 26% spent less than 1% of payroll and 23% spent between 1% and 2% on healthcare benefits.
Cost has been the main influencer on employers’ decisions to buy or continue to offer healthcare benefits since this question was first asked 11 years ago in 2006. Back then, 80% of respondents cited this as their top factor, compared with 78% in 2011 and 2013, and 76% in 2009.
This year, cost ties for the top slot along with employee engagement and a desire to boost overall employee wellbeing. These have gradually risen up employers’ agendas when it comes to their healthcare benefits strategy.
Yet, despite the often vast sums this involves, the proportion of respondents that calculate the return on investment (ROI) on their healthcare spend has remained consistently low. Just 12% of respondents say that they currently calculate the ROI on this spend, compared to 7% in both 2013 and 2009, and 10% in 2011.
Over the years, a steady proportion of respondents have said that they plan to begin doing so, but this does not appear to have translated into action.
Read the full Employee Benefits/Health Shield Healthcare research 2017.
The estimated cost to respondents of providing healthcare benefits (including the cost of insurance, adviser, consultant, administration and/or communication)
Less than 1% of payroll 21%
1-3% of payroll 33%
4-6% of payroll 13%
7-9% of payroll 1%
More than 10% of payroll 3%
Do not know 30%
Sample: All respondents (104)
The factors that influence respondents’ decisions to buy or continue to offer healthcare benefits
Reasonable cost 74%
To boost overall employee wellbeing 74%
Employee engagement 74%
To be seen as an employer of choice 72%
A desire to support employees 64%
The range of benefits offered by a provider 51%
To reduce sickness absence 50%
Their competitors offer them 45%
Staff want them 44%
They have always offered them 38%
To be able to offer rehabilitation 27%
Legislative requirements 24%
The need to support an increasingly diverse workforce 24%
The cost of benefits versus the risk of not having cover 20%
The need to tackle a specific requirement (such as musculo-skeletal issues) 16%
Legacy scheme from merged organisation 3%
Sample: All respondents (107)
Do respondents calculate the return on investment for their healthcare benefits spend?
They do not 69%
They do not but they are planning to 19%
They do 12%
